medium · Market Microstructure
A stock is subject to the Limit Up-Limit Down (LULD) rules. Its reference price over the last 5 minutes is $100.00, and it is a Tier 1 security with a 5% band.
If a sudden surge in buying pushes the price to $105.01, what happens next?
- The price immediately executes at $105.01, and the stock halts right after.
- The trades that occurred above the band are cancelled, and the price resets to $100.00 flat.
- The entire broad market, including every stock in the S&P 500 index, halts trading for 15 minutes.
- The stock enters a 15-second 'limit state' and may trigger a 5-minute trading halt.
Sign up free to see the explanation and track your rank →
More Market Microstructure practice
- A stock is quoted at $50.00 bid x $50.10 ask. A buyer submit… — How does this action affec
- A stock is trading at $100.00. The Level 1 S&P 500 Market-Wi… — What is the status of trad
- If the stock price drops instantly from $50.05 to $49.00 in a 'flash crash,' what happens
- Under the National Market System (Reg NMS), if Exchange A is quoting a stock at $10.00 x
- If the stock gaps down and opens at $69.50 on Tuesday morning, at what price will the trad
- If the dealer uses a quote shading parameter of κ = 0.00004 to manage inventory, what is t
- A trader places a large sell order for 50,000 shares at $50.01 only to cancel it immediate
- Using the Lee-Ready algorithm, how should a trade occurring at $50.10 following a $50.00 t